Question

Compound Interest: A woman puts $6,000 in a savings account that pays 5% compounded annually. How much money is in the account at the end of 2 years?There is $ ? in the account after 2 years.

Answer 1

Step 1

State the formula for the compound interest

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ \text{Where,} \\ A=\text{ amount} \\ P=\text{Principal = \$6000} \\ r=rate=(5)/(100)=0.05 \\ n=\text{ number of times compounded=1} \\ t=\text{ 2} \end{gathered}`

Step 2

Find the amount that will be in the account at the end of two years